🔒Rallybio merger deal includes $50M breakup fee, $200M financing floor

New Haven-based Rallybio Corp.’s proposed merger with San Diego biotech Candid Therapeutics includes a potential $50 million breakup fee payable by Candid under certain circumstances, according to new details released in a regulatory filing. The filing outlines termination provisions that could require Candid to pay Rallybio up to $50 million if its board withdraws support for the deal or enters into an alternative agreement, among other scenarios. In a narrower set of circumstances — such as if the merger is not completed by a specified end date and Candid later pursues another transaction — the termination fee would be $10 million. By comparison, Rallybio would owe Candid $1.425 million if the New Haven company terminates the agreement under certain conditions, including if it fails to secure shareholder approval and later completes another transaction. The merger, announced March 2, is expected to close in mid-2026, subject to shareholder approval and other customary conditions. The filing also outlines a minimum financing threshold tied to the deal’s completion. While the companies have announced $505.5 million in committed concurrent private financing, the merger agreement requires that at least $200 million of those proceeds be received in order for the transaction to close. The larger financing round is expected to provide the combined company with approximately $700 million in cash at closing, funding operations through 2030. The $200 million minimum, however, establishes a floor that must be met for the merger to proceed. The deal would result in Candid’s leadership team taking over the combined company, which will operate under the Candid Therapeutics name and remain publicly traded on Nasdaq. Rallybio went public in 2021 and in recent years has scaled back drug development programs and reduced its workforce amid capital constraints.